After months of controversy and delay, Brazil's environmental agency IBAMA issued an environmental license for the construction of the Urucu - Porto Velho gas pipeline, ignoring the broad swathe of civil society opposition to the project.
The 500-kilometer pipeline will pass through some of the most isolated and inaccessible regions of the Brazilian rainforest. A 15-30 meter wide road will be constructed along the entire length of the pipeline, effectively opening up this remote Amazon heartland to invasion and colonization.

Isolated indigenous groups living along the pipeline right of way are now faced with the irreversible loss of natural resources on which they depend for survival. The risk of land speculation, uncontrolled logging and forest clearing by ranchers and farmers could permanently alter their way of life.
Environmentalists, indigenous organizations and other civil society groups have expressed serious reservations about the granting of the license. Although the public hearings for the project were repeated after an eruption of protest about undemocratic processes, the granting of the license does not take into consideration any major environmental and social concerns expressed at the hearings. Existing feasible alternatives to the pipeline do not appear to have been incorporated into IBAMA's decision-making process.

The Urucu and Jurua gas fields are located in a remote region of primary rainforest 600 km due west of Manaus in the heartland of the Brazilian Amazon. The Urucu-Jurua Gas Field Development Project plans to construct two new gas pipelines: the first would extend 550 km from Urucu to Porto Velho and the second would extend 420 km from Coari to Manaus.
The proposed pipelines represent stage two of the Urucu-Jurua Gas Field Development Project. In 1998, the Brazilian federal energy company Petrobras constructed the first leg of the pipeline network - a 280km pipeline running from the Urucu River to the town of Coari -- which had disastrous impacts on the local communities and the rainforests along its path. Now Petrobras plans to build two more extensions.
This undertaking is one of 20 major infrastructure projects launched as part of President Fernando Enrique Cardoso's "Advance Brazil" program. The new pipelines, which would traverse remote Amazon rainforest, would provide natural gas to power plants such as the Porto Velho Power Station in Rondonia, as well as to the energy deficient states of Amazonas and Acre.

The Coari-Manaus pipeline project was abandoned in summer 2001 after the Governor of the State of Amazonas responded to fears over the pipeline's damaging environmental impacts. Pressure from environmental groups and local communities pushed the state government to suspend the pipeline project in favor of alternative river transportation. Bidding rules were published in July for a 30-year concession to transport natural gas by barge from the Urucu field to the city of Manaus. However its sister pipeline, Urucu-Porto Velho, is moving ahead despite strong local opposition based on environmental and social concerns.

The consortium behind the Urucu-Porto Velho gas pipeline is composed of Petrobras (Brazil), El Paso Energy International (U.S.) and Termogas (Italy). Petrobras operates through its natural gas subsidiary, Gaspetro. The Houston-based El Paso Energy is the majority owner and operator of the Porto Velho gas power station. The new pipeline would transport 2-3 million cubic meters of gas per day to the 350 mega watt power station.
The Urucu-Porto Velho pipeline will cost US$175 million. The Brazilian government is financing 15 percent of the project; the remainder of resources is expected to come from the private sector and international financial institutions. The Brazilian National Development Bank, BNDES, is to contribute 60% of the project cost in loans.
The Urucu gas region has a history of environmental controversy. The U.S.-based NGO Environmental Defense identified the Urucu Natural Gas Processing Plant as one of the ten worst projects funded by Export Credit Agencies (in this case the Export Import Bank of Japan), and in collaboration with other groups successfully lobbied public financial institutions to prevent funding for similar environmentally sensitive projects.
Given this history of controversy, some analysts have expressed concern that further environmental and social impacts may impair the prospect of obtaining financing from public institutions for the pipeline project. These institutions include export credit agencies such as the U.S. Overseas Private Investment Corporation (OPIC) that, as a matter of policy, claim to avoid financing projects located in pristine or ecologically significant tropical forests.

The damaging environmental and social impacts of the Urucu-Porto Velho pipeline are substantial. The project involves not only cutting open forest for the pipeline route but also constructing a road, 15-30 meters in width, along the entire length of the route. The road would essentially link the large city of Porto Velho to the heart of the rainforest opening up this hitherto pristine area to a wave of migrants.
As with other Amazon energy infrastructure projects, the Urucu-Porto Velho pipeline would serve as a conduit for loggers, miners, ranchers, and colonists to spread deforestation into previously pristine areas and the ancestral lands of isolated and vulnerable indigenous peoples including the Apurina, Paumari, Deni and Juma.
Urucu gas fields and pipeline region has been categorized by conservation organizations as being of the "highest priority for biodiversity conservation" in Brazil. Some areas in the project's zone of influence, such as the Abufari Biological Reserve, have protected status, which could create legal and permitting liabilities for the proposed project. The route's zone of influence would also impact over a dozen legally recognized (or in the process of being recognized) indigenous territories, such as the Jacareuba/ Kataxixi Reserve.
The existing Urucu-Coari pipeline has had devastating social impacts on the town of Coari. Extensive migration provoked substantial increases in drug trafficking, violent crime, child prostitution and sexually transmitted diseases such as AIDS. Therefore, some Brazilian groups and the Catholic Church oppose the new pipeline project and propose meeting projected power needs in Amazonas and Acre through alternatives such as importing relatively cheap energy from the excess capacity from the Guri dam in Venezuela.

The Environmental Impact Assessment (EIA) for the Urucu-Porto Velho pipeline was submitted in July 2001 and has yet to be approved. However, preliminary studies have lambasted it. Critics call into question the independence of the assessment arguing that the environmental agency CEPEMAR worked in conjunction with GASPETRO and under the direct control of Petrobras. They point out that CEPEMAR spent only 14 days studying small sections of the pipeline route making serious scientific analysis of the physical and biological environment impossible and ruling out any accurate prognosis of future impacts on the region.
Initial studies of the EIA also found that it does not identify most potential socio-economic impacts and associated mitigating measures. The participation of civil society organizations in project implementation and monitoring is not foreseen. Areas of project influence are limited and poorly defined and the worst impacts facing the indigenous population are not considered.
The Brazilian NGO Pastoral Land Commission (CPT) joined local and international NGOs (including Friends of the Earth) in arguing that the license should not be granted because Petrobras failed to inform local communities about the negative impacts of the pipeline on their lives. The original public hearings held as part of the EIA process were ineffective, as local opinion was not incorporated into the decision-making process. Furthermore, a limited period of time was initially allotted for public review of the EIA.
In November 2001, the federal environmental agency IBAMA ordered a halt to public hearings to discuss the pipeline EIA because of the lack of adequate public consultation. The Amazonas State Environmental Body, Ipaam (Institute of Amazonian Environmental Protection), also voiced strong concerns about the potential negative economic, social and environmental impacts and argued that the pipeline represents an unsustainable and irrational use of natural resources. The public hearings process was postponed until March 2002.

The postponed public hearing held in February and March 2002 provoked an outpouring of local concern about the Urucu-Porto Velho pipeline project.
CUNPIR, an indigenous organization representing 50 indigenous peoples living in the vast border area of the states of Rondonia, Mato Grosso and Amazonas, expressed alarm about potential impacts on peoples living in voluntary isolation such as the Deni, Rimarima, Paumari, Catawixi, Juma and Apurin_œ. These peoples have a semi-nomadic lifestyle and depend entirely on forest resources for their survival.
The Organization of Indigenous Peoples of the Middle Purus (OPIMP) affirmed that indigenous peoples of the region are preoccupied about the impacts of the project, particularly on the isolated Katawixi group, who occupy an area five kilometers from the proposed route of the pipeline.
The gas pipeline places the physical subsistence and cultural integrity of indigenous peoples at risk. The invasion of their lands by migrants and depletion of their natural resource base will provoke changes in customs. Men will be obliged to leave their villages to work for the company as fishermen, hunters and gatherers to provide food. The spread of disease and the disintegration of village life appear to be inevitable. The presence of a large contingent of company workers, who will also take local food resources will add to social conflict. The stability of fish stocks was also identified as the principal concern of representatives of other river dwellers. Violence associated with land grabbing and speculation is also a major fear.
A local mayor and a bishop raised the issue of the expected increases in violence, child prostitution and alcohol and drug problems. The mayor demanded that Petrobras introduce measures to mitigate the negative impacts of the project.
At a hearing in the town of Tapaua, Petrobras clarified that there would be few employment vacancies generated by the project for local peoples and that jobs would be for a limited period, thus dashing the hopes of the majority of the population of Tapaua who had expected work opportunities.
The Pastoral Land Commission (CPT) questioned Petrobras attitudes towards democratic debate pointing out that days before each hearing the company had approached local authorities to offer compensation packages. CPT accused Petrobras of attempting to influence local officials' input to the hearings.

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